Powell’s Jackson Hole Speech Is Full of Holes - Ep 915

* The month of January came to an end, and it didn't play out the way most people believed it would * Remember when the year began, everybody was optimistic on the U.S. dollar * Remember I said that it was the most crowded trade * It was just like gold the year before * Everybody was convinced that now that Trump was President we were going to have all this fiscal stimulus * The Fed was going to be tightening rates more aggressively * The dollar had no place else to go but up; * Everybody started the year long the dollar * I just read that this was the worst January for the dollar in almost 30 years! * For all the fanfare and the hype about Dow 20,000 * The Dow was only up about .5% in the month of January * You would think that it was much higher than that * And of course, measured in any other currency, the Dow was down quite a bit * In fact, if you just look at our mutual funds * To just give you an example of what's going on overseas * First of all, our Gold Fund up 12% in the month of January * But my International Value Fund was up 6.5% in the month of January * That fund is the #1 fund on Morningstar so far in 2017 * It was also the #1 fund in its category of 400 or so for all of 2016 * And it's already the #1 fund for 2017 * But if you look at the returns that are being achieved internationally * Investing outside the dollar * Investing in gold stocks * That's where all the money is being made * It's not being made in the U.S. Stock Market * In other currencies, it's actually, it's only up in dollars * But it's down in terms of just about every other currency * So you wouldn't know that from listening to the pundits * Everybody is so excited about what's going on * Again this is probably how it all started when George Bush came in * People were still initially enthusiastic about what was going to happen * But the honeymoon didn't last long Our Sponsors: * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

2 Helmi 201728min

* Earlier this morning we got the first look at Q4 GDP * As I suggested on the last podcast, in fact as I have been saying all along * We did see a sharp decline from the Q3 3.5% GDP * The consensus was for a 2.2% estimate for growth in Q4 * And we came in at 1.9% * Quite a way below estimates and psychologically below the 2% number * Part of the reason was a big drop in exports * I talked about this last quarter * One of the reasons we got that 3.5% jump in Q3 GDP * Was the big surge in soybean exports, because of a drought overseas * Which created a temporary increase for U.S. beans * The rest of it was an inventory build, which I still think needs to be worked off * In fact, I think we're going to work off a lot of it in the first quarter of this year * That's the first estimate, and, who knows, they may downward revise it the next time they give us the numbers * If you now take the first 3 quarters of GDP growth, and use the first estimate for Q4 * For the entire year of 2016 GDP grew at just 1.6% * That is the lowest number since 2009, tied with 2011, at 1.6% also * If you remember 2011 GDP growth was so weak that they launched QE3 for 2012 * So they ended QE2, the economy started rolling over * And when they got that 1.6% GDP for the entire year * The Fed very quickly came out and launched QE3 the following year to goose the GDP back up *  What are they doing now?  Not only is the Fed not preparing to launch another round of QE * They are tightening monetary policy * They're saying, "We're going to raise interest rates 3 times, even though GDP is as low as it has been for the entire "recovery' * Even though the economy is decelerating, we are going to sedate it with rate hikes Our Sponsors: * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

28 Tammi 201735min

* Short and not-so-sweet.  Maybe that's how you would describe President Trump's inaugural speech * Which, I think was the briefest since Jimmy Carter * But now, Donald J. Trump is the 45th President of these United States * I did in general like his speech; I agree with much of what Donald Trump had to say * Talking about how bad things are in the U.S. economy * Yes, there were some people who benefited * People in Washington certainly benefited, certainly Washington has been booming, right? * Because they've been sucking all the wealth out of the rest of the country * So the bureaucrats and certain segments of the population have benefited * From central planning and central banking and the cheap money and the bubbles * But Donald Trump hit the nail on the head * When he talked about all the factories like tombstones littering the landscape * How our wealth has been sucked out * The Middle Class has been hollowed out and the country is hurting * All this is true, and I like the fact that he says we're going to take back the government for the people * Take it away from the elites, take it away from the bureaucrats and bring the power back to the people * All that is great. * The question is, What exactly does Donald Trump mean by that? * Does he mean, get the government off the people's backs? * Does he mean unshackle us from government * Get rid of all the regulations, get rid of all the taxes and government spending * Get rid of all the bubble blowing * Let's have sound money and higher interest rates * Let's have a real economy so that individual Americans can pull themselves up out of the ditch on their own? * That we can roll up our sleeves and work our way out of this gigantic hole that the government placed us in * And if it's going to be free enterprise, limited government and freedom? * Of that's what he means by "Taking back the government for the people" * Then, that's great * But what if he doesn't mean that? * What if he means a Trumpian "New Deal"? * What if he's talking about government proactively doing things to "help" the middle class * Like big spending on infrastructure, where the government employs the people directly * And creates jobs, like they did during the Great Depression? Our Sponsors: * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

21 Tammi 201730min

* As I said on a prior podcast, this could be the first Presidential Honeymoon to end before the marriage officially begins * Donald Trump will not be sworn in until Friday * Yet the Honeymoon already appears to be over for the Trump Trade * The dollar continues to decline again today; gold continues to rise * Confounding the experts who, at the beginning of the year, predicted the opposite * Gold up again today about $14 it was up $4-5 yesterday, on the Martin Luther King holiday *  We're now at about $1217 for the price of gold * We're still below where we were the day Trump won * But this is the highest we've been in about 6 weeks, maybe more * It's certainly the highest for the year * Dollar down across the board; dollar index at the low for the year * Still up from Trump's victory but down quite a bit from the highs * Of course, other currencies, even though the dollar index is down 2% * You've got currencies like the Australian dollar up 4.5% * So that currency has pretty much recovered everything that it lost based on the Trump victory * Gold, although it hasn't recovered everything, it's still up almost 6% so far year to date * Silver's up better than 7% year to date * Gold stocks, look at the GDX, up 12% so far this year * That means that gold stocks by far is the top performing sector in 2017 * They were by far the top performing sector in 2016 * I actually think the out-performance in 2017 will be even greater than 2016 * The Dow, down again, at one point it was down close to 100 * Dow transports ended down over 100 * I think the Dow is basically flat on the year - slightly positive * The NASDAQ was down 35 points; S&P down as well * So U.S. stocks are barely moving * Foreign stocks - some of these emerging markets are up huge, especially priced in U.S. dollars * All the foreign markets, thus far in 2017 are beating the U.S. market * Again, that is not what all the experts were expecting from the Trump Rally Our Sponsors: * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

18 Tammi 201729min

* It's Friday the 13th and it is a Friday before a 3-day holiday weekend * Monday, of course is Martin Luther King Day * The stock market will be closed in observance of the holiday * Once again, I guess Friday the 13th was bad luck for those hoping for Dow 20,000 * In fact, the Dow finished the day Down, it was a slight decline for the Dow * But not so for gold; gold was up again * The Dollar was actually down again * In fact, this year is already shaping up to be a mirror image of what everybody expected when the year began * The Dow is up slightly, about a half a percent; the S&P is maybe up about 1-1/2 percent * But look at the dollar; the dollar index is down 1% * In terms of foreign currencies, the Dow is actually down * The dollar index is mostly the euro * If you take a look at some of the other currencies, the Canadian Dollar, for example, is up 2.5% so far in 2017 * The Australian dollar is up 4% * These are some pretty big moves early in the year * Remember, everybody was bullish on the dollar * That was the trade, it was so crowded, everybody was in it * Every strategist that I saw on financial news at the end of last year and early this year * Was long the dollar, short the Aussie, short Canada, short the euro, short the yen * Meanwhile, all these currencies are going up * I think they're going a lot higher and I think the shorts are going to lose a lot of money * Take a look at gold stocks * Gold stocks are up about 10% so far in 2017 only 2 weeks into the year * This is already a much stronger start for gold stocks than we had last year * And of course, last year was a great year for gold stocks despite the fact that they sold off toward the end of the year * Based on all the hype surrounding Donald Trump and all the great economic growth that we are going to get * And how the Fed is going to be raising rates even faster and the dollar was going to be even stronger * I knew all that was a bunch of nonsense * People still believe it, but the markets are already showing it to be a false paradigm * And most of the Wall Street strategists are going to once again miss out on these opportunities Our Sponsors: * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

14 Tammi 201736min

* The NFIB Index of Small Business Optimism in the month of December, so this is post the election of Donald Trump * Shot up from 98.4 in November to 105.8 * This is the highest level in 12 years - since before Obama was President * And it's the biggest monthly jump in 37 years * You have to go all the way back to 1980, the election of Ronald Regan to find a moment in time where you saw this big an increase in optimism, in confidence among small business owners * Remember, it was Michelle Obama not too long ago * Saying, "This is horrible, there's no hope anymore in America!" * Well, small business owners haven't been this hopeful since I was in high school * Why are they so optimistic? * Well, first of all, it's more a testimony to how horrible things have been over the last 8 years * People are just hopeful that now there's going to be some relief, that Barack Obama is gone * Because the lat 8 years have been very, very difficult for small businesses * First of all, if you're running a small business, you can't take advantage of zero percent interest rates * You can't just show up at the discount window and borrow from the Fed * Also, you can't sell bonds into the bond market, like big corporations can * If you're a small business, and you need credit, you've got to go to a bank and get a loan * But the banks don't have any money - there's no savings - nobody's putting money into the bank * And no banker wants to carry a risky loan on his books * When he can just own U.S. Treasuries * The regulators are all over you, if you actually make a loan to a business * So businesses haven't gotten capital * Meanwhile the cost of doing business has gone up because there's been all sorts of regulations that have been added to the burden of business * Over the lat 8 years Our Sponsors: * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

11 Tammi 201737min

* Yesterday we got the final jobs report of the Obama era, * We got the December Non-Farm Payroll. * Now technically, when we get the January number, the first Friday of February, * Half of that would have been during the Obama presidency, * But because we won't get the official news until the Trump presidency, * I'm sure that Donald Trump is going to take the credit, or maybe have to deal with the blame, * Depending on how that number ends up being received, whether it beats the consensus or misses, * But this is really the final jobs number for Obama. * The number came out O.K. * It missed the consensus estimate, which was 175,000 jobs, * And the actual number, at least until they revise it next month was 156,000 * So that was below what was expected. * Now they did revise upward the prior month from 178,000 to 204,000 * And the month before that was revised down a bit * So I guess, when you take all the revisions, it was probably about a push on the number. * This report should have been seen as not so good, * Most of what I was reading was about how strong, not only this report was, * But the entire job-creation legacy of Barack Obama * This is what you get from the mainstream media * That peddles all the fake news * About what a great economy President Obama is handing off to Donald Trump; * That we have really low unemployment - * The official unemployment rate kicked up from 4.6, but still 4.7, * So, low unemployment, all these jobs being created, * Forgetting about the fact that once again, you're talking about low-paying, part-time jobs that have been created * In fact, the number of Americans not in the work force grows again; * It wasn't a big jump, but it was still a jump * To a new all-time record high. * So labor force participation has been eviscerated during the Obama years. Our Sponsors: * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

7 Tammi 201738min

* This is another big week for economic data; it is a holiday-shortened week * On Friday we get the big Non-Farm Payroll report * If it's a good number, somehow Donald Trump will try to take credit for it, as he has for the rise in the stock market * But I think that the job numbers, while maybe not bad just yet, but I think we will have a lot of problems with the non-farm payroll numbers in 2017 as the air starts coming 0ut of the part-time job bubble while Trump is in office *  But we did get some economic news today, most importantly, the minutes from the last Federal Open Market Committee Meeting and * What do you know? The members of the FOMC are concerned that maybe, they're not optimistic enough when it comes to growth * Because of the stimulus packages that may be passed by Donald Trump, that they may be wrong, and that the economy could grow faster than they think * They also were worried that they might overshoot on the downside on unemployment * Unemployment could actually get even lower than what they thought * And therefore that ultra-low unemployment may put some upward pressure on inflation * Of course, this is all the Keynesian/Phillips Curve myth * That low levels of unemployment are what cause inflation * Ironically, it is the Federal Reserve that causes inflation and there is going to be * Consumer price increases that are the consequences of the inflation that the Fed has already created and that the Fed is going to create * In fact, if we do have a stimulus package that gets through Congress early in 2017 * That includes tax cuts and government spending increases which results in a larger deficit * The inflationary forces are not going to be the debt itself, but the Fed's willingness to accommodate those deficits with more aggressive monetary easing * In fact, the complexion of the FOMC is actually going to get more dovish next year as some of the so-called hawks, and of course, none of them are actually hawks, it's all degrees of dovishness * Some of the less dovish members will be leaving and will probably be replaced by members that are just as dovish as everybody else * So I think the Fed will be willing and able to accommodate these deficits * That is what is going to cause inflation Our Sponsors: * Check out Infinite Epigenetics: https://infiniteepigenetics.com/GOLD * Check out Justin Wine and use my code SCHIFF20 for a great deal: https://www.justinwine.com Privacy & Opt-Out: https://redcircle.com/privacy

5 Tammi 201725min